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Richemont’s sales in Asia-Pacific continues to surge

Swiss luxury goods holding company Richemont reported a 23 percent sales growth for the three months ended 31 December 2010. The growth was broad-based, with the highest rate reported in the Asia-Pacific region, the company said in an official statement.

Sales in Asia-Pacific increased 42 percent year on year, to EUR772 million (USD1.03b), reflecting a continuation of the Maisons’ expansion in that fast-growing region. Sales in Japan continued to grow at a low rate in yen terms. Growth in Japan slowed to 3 percent to EUR233m (USD310.78m), compared to EUR191m (USD254.76m) same period last year. Total sales from October to December 2010 increased to EUR2.107b (USD2.81b), compared to EUR1.595b (USD2.11b) same period last year.

In terms of sales by distribution channel, the highest rate reported in retail with a 31 percent growth to EUR1.069b (USD1.43b). According to Richemont, the sales growth partly reflected the acquisition of NET-A-PORTER.COM. Excluding that business, retail sales increased in the third quarter by 23 percent at constant exchange rates.

Demand for the group’s products was broad-based, with all business areas reporting double-digit sales growth. Sales of Jewellery Maisons increased 20 percent to EUR1.088b (USD1.45b).

"Richemont’s Maisons performed well and saw good sales growth, particularly at the retail level, during the three-month period. Sales in the month of December grew by 17 percent at constant exchange rates and excluding the impact of the NET-A-PORTER.COM acquisition," executive chairman and group CEO Johann Rupert said.

The CEO also said as indicated previously, higher comparative figures will make the final quarter of the financial year ending 31 March 2011 more challenging for the group. "Gross margin is anticipated to be negatively affected by a stronger Swiss franc given the group’s Swiss manufacturing base and by the planned changes to product lines at one of the group’s Specialist Watchmakers, which will be largely implemented during the coming quarter," Rupert said.

The group’s net cash position at 31 December 2010 amounted to some EUR2.2 billion (USD2.93b). Linked to this position, it is anticipated that the strength of the Swiss franc will result in higher non-cash financial charges for the year.